The present invention relates generally to Internet based advertising, and more particularly to Internet based advertising wherein an advertiser pays for advertisement placement on an affiliate's web site and the affiliate's web site receives compensation for placing the advertisement.
Internet related traffic, or visits to a web site by an Internet user, is the main statistic used by an Internet advertiser to determine where to display and how much to pay for its advertisement on another's web site. Typically, the more Internet traffic a web site that is displaying an advertiser's advertisement is receiving, the greater the possibility for the advertiser to have its products or services exposed to potential purchasers. As such, there is an incentive for an advertiser to display its advertisements as immensely as possible in order to reach the broadest potential purchaser base.
A common method of Internet advertising includes charging an advertiser for the exposure of its advertisement to all Internet users regardless if the advertisement resulted in the Internet user actually visiting the advertiser's site by clicking on the advertisement. For example, an advertiser may pay an affiliate site that is willing to display the advertiser's advertisement for the number of times that the advertisement is displayed. While this method of advertising offers a potentially high exposure rate to numerous Internet users, such simplistic exposure to such a large number of Internet users offers little in the form of Internet users generally interested in the advertisement, which would prompt the Internet user to visit the advertiser's Internet site to purchase the advertised product or service. For example, out of 10,000 Internet users that the advertisement was displayed to, if only 10 went to the advertiser's web site to view the advertiser's products or services, the advertiser must still pay for the 10,000 advertisement displays.
It is well known that actual Internet traffic can be used as the main means for determining whether or not compensation should be paid by the advertiser for a referral via an advertisement placed on an affiliate's site, commonly referred to as “Pay Per Click” advertising. With Pay Per Click advertising, the advertiser compensates an affiliate only if an Internet user is actually interested in the advertisement and subsequently visits the advertiser's site by clicking on the advertisement displayed on the affiliate's site. In other words, the advertiser pays the affiliate for displaying the advertisement only if the advertisement is successful in enticing an Internet user to visit the advertiser's Internet site from the affiliate's site.
In conventional Pay Per Click systems, the advertisers bid for keywords, wherein the highest bidding advertiser for a keyword is placed highest in a search results listing. It is also well known that, in order to increase its exposure, advertisers commonly bid for keywords that are irrelevant to the advertiser's offered goods or services. Accordingly, the advertiser that is capable of out-bidding other advertisers for a keyword is listed highest in a search results listing, regardless if such advertiser's goods or services are relevant to the queried keyword. As such, the present bid-placement methods are unjust wherein the advertisers with the greatest amount of capital are typically listed higher in the search results list.